Summarize the events and the results of the election of 1832. Clay responded by sarcastically alluding to a brawl that had taken place between Thomas Benton and his brother Jesse against Andrew Jackson in 1813. It had too much money which it was using to corrupt individuals. Gold and silver was the only way of having a "fair and stable" currency. Corrections? [120] Jackson enthusiastically accepted McLane's proposal, and McLane personally told Biddle about his success. The Bank War “Unless ... President Andrew Jackson to John Coffee, February 19, 1832. [246], Taney, in his capacity as an interim treasury secretary, initiated the removal of the Bank's public deposits, spread out over four quarterly installments. This money has to be paper; otherwise, a bank can only lend as much as it takes in and hence new currency cannot be created out of nothing. [125][139] In the House of Representatives, McDuffie, as Chairman of the Ways and Means Committee, guided the bill to the floor. [333], Daniel Walker Howe criticizes Jackson's hard money policies and claims that his war on the Bank "brought little if any benefit" to the common men who made up the majority of his supporters. [17], Despite opposition from Old Republicans led by John Randolph of Roanoke, who saw the revival of a national bank as purely Hamiltonian and a threat to state sovereignty,[18] but with strong support from nationalists such as Calhoun and Henry Clay, the recharter bill for the Second Bank of the United States was passed by Congress. [177] He pitted the idealized "plain republican" and the "real people"—virtuous, industrious and free[178][179]—against a powerful financial institution—the "monster" Bank,[180] whose wealth was purportedly derived from privileges bestowed by corrupt political and business elites. "If you apply now," McLane wrote Biddle, "you assuredly will fail,—if you wait, you will as certainly succeed. [183], To those who believed that power and wealth should be linked, the message was unsettling. This led to the failure of state banks and the collapse of businesses, turning what could have been a brief recession into a prolonged depression. under Bank President William Jones through fraud and the rapid emission of paper money. However, Harrison died after only a month in office, and his successor, John Tyler, vetoed two bills to reestablish the Bank. Senator George Poindexter of Mississippi received a $10,000 loan from the Bank after supporting recharter. Some members of the Democratic Party questioned the wisdom and legality of Jackson's move to terminate the Bank through executive means before its 1836 expiration. ... and I cannot fear the result. [333] Robert V. Remini believes that the Bank had "too much power, which it was obviously using in politics. Jackson found out about this after Blair offered to resign. [128] Jackson, without consulting McLane, subsequently edited the language in the final draft after considering Taney’s objections. [151] Jackson’s supporters benefited in sustaining these attacks on the Bank[152] even as Benton and Polk warned Jackson that the struggle was "a losing fight" and that the recharter bill would certainly pass. In his December 6 address, Jackson was non-confrontational, but due to Taney's influence, his message was less definitive in its support for recharter than Biddle would have liked, amounting to merely a reprieve on the Bank’s fate. [325][326] Farmers and planters suffered from price deflation and debt-default spirals. This article was most recently revised and updated by, https://www.britannica.com/event/Bank-War, The White House Historical Association - The Bank War. He also won the states of New Hampshire and Maine, fracturing the traditional Federalist/National Republican dominance in New England. wishes, that is, to have it in its power to distress the community, destroy the state Banks, and if possible to corrupt congress and obtain two thirds, to recharter the Bank." notes were receivable for federal bonds. Jackson declined. [12][13] Vast western lands were opening for white settlement,[14] accompanied by rapid development, enhanced by steam power and financial credit. Jackson, however, believed that large majorities of American voters were behind him. [281], The economy improved significantly in 1834. [143], On January 6, 1832, bills for Bank recharter were introduced in both houses of Congress. [124] McLane would then present his proposals for reform and delay of recharter at the annual Treasury Secretary's report to Congress shortly thereafter. Jacksonians—gathered in Rochester, New York to form a new political party. Bank War, in U.S. history, the struggle between President Andrew Jackson and Nicholas Biddle, president of the Bank of the United States, over the continued existence of the only national banking institution in the nation during the second quarter of the 19th century. PET BANKS. He drew black lines through the text recording the censure and beside it wrote: "Expunged by order of the Senate, this 16th day of January, 1837". [137] Within days of Jackson's address, party members gathered at a convention on December 16, 1831, and nominated Senator Clay for president. president in the legislative process as evidence of the Bank’s corrupting influence on free government. [155] After months of debate and strife, pro-B.U.S. Historian Ralph C.H. He resigned immediately. He refutes the idea that the collapse of the Bank was responsible for the Panic of 1837, which he describes as "a world-wide economic collapse", but concedes that it "may have exacerbated" the crisis. [159] Not long after, Jackson became ill. Van Buren arrived in Washington on July 4, and went to see Jackson, who said to him, "The Bank, Mr. Van Buren, is trying to kill me, but I shall kill it. By the summer of 1842, eight states and the Florida territory had defaulted on their debts, which outraged international investors. He praises the Bank and Biddle's conduct, claiming that Jackson's war on it created a periodic of economic instability that would not be remedied until the creation of the Federal Reserve in 1913. But Jackson's strategy eventually paid off as public opinion turned against the Bank. However, many agree that some sort of compromise to recharter the Bank with reforms to restrict its influence would have been ideal. With the help of Navy Secretary Levi Woodbury, they drafted an order dated September 25 declaring an official switch from national to deposit banking. Andrew Jackson. How should Americans, then, and especially American Southerners, view Andrew Jackson? [163] Jackson officially vetoed the legislation on July 10, 1832,[157] delivering a carefully crafted message to Congress and the American people. [46][47][48] The Jacksonian movement reasserted the Old Republican precepts of limited government, strict construction, and state sovereignty. [117][125], Despite McLane's attempts to procure a modified Bank charter,[126] Attorney General Roger B. Taney, the only member of Jackson's cabinet at the time who was vehemently anti-B.U.S., predicted that ultimately Jackson would never relinquish his desire to destroy the central bank. In a move intended to wrench political support from Jackson, Henry Clay forced a bill through the Senate to recharter the Bank. He denounced the Bank as a "moneyed tribunal" and argued for "a hard money policy against a paper money policy". PET BANKS. [215][216] During the final phase of the 1832 election campaign, Kendall and Blair had convinced Jackson that the transfer of the federal deposits—20% of the Bank's capital—into private banks friendly to the administration would be prudent. Candidates were called at national nominating coventions for the first time too. Jackson's Kitchen Cabinet, led by the Fourth Auditor of the Treasury Amos Kendall and Francis P. Blair, editor of the Washington Globe, the state-sponsored propaganda organ for the Jacksonian movement, helped craft policy, and proved to be more anti-Bank than the official cabinet. Consequently, Jackson set out to destroy the Bank. "[183] Yet the bulk of Jackson’s supporters came from easy lending regions that welcomed banks and finance, as long as local control prevailed. [27], The end of the War of 1812 was accompanied by an increase in white male suffrage. Clayton's committee report, once released, helped rally the anti-Bank coalition. This would lead to lenders demanding that the banks take back their devalued paper in exchange for specie, as well as debtors trying to pay off loans with the same deflated currency, seriously disrupting the economy. Jackson was enraged by this so-called "corrupt bargain" to subvert the will of the people. [313] The resulting drop in the price of cotton precipitated much of the damage of the financial panic. [124][131], The enemies of the Bank were shocked and outraged by both speeches. Hamilton supported the Bank because he believed that it would increase the authority and influence of the federal government, effectively manage trade and commerce, strengthen the national defense, and pay the debt. [216][219] In response, the Democratic-controlled House conducted an inquiry, submitting a divided committee report (4–3) that declared the deposits perfectly safe. A third party, the Anti-Masonic party, entered the. Jackson ordered that no more government funds be deposited in the bank. [148][149] These delaying tactics could not be blocked indefinitely since any attempt to obstruct the inquiry would raise suspicions among the public. Indeed, Jackson had predicted in his first annual message of 1829 that the Bank's stockholders would submit an early application to Congress. [92] One of the first orders of business was to work with pro-B.U.S. [261], The men took Jackson's advice and went to see Biddle, whom they discovered was "out of town". The Andrew Jackson 's War On Against The U.s. Bank 848 Words | 4 Pages. [56] Supporters of soft money tended to want easy credit. & S. Joseph & Company, to do the same. The mission of the Abbeville Institute is to preserve what is true and valuable in the Southern tradition. [327], Whigs and Democrats blamed each other for the crisis. It depicted Jackson in full regal dress, featuring a scepter, ermine robe, and crown. Jacksonians framed the issue as a choice between Jackson and "the People" versus Biddle and "the Aristocracy",[197][199] while muting their criticisms of banking and credit in general. The proposals included some limited reforms by placing restrictions on the Bank's powers to own real estate and create new branches, give Congress the ability to prevent the Bank from issuing small notes, and allow the president to appoint one director to each branch of the Bank. Andrew Jackson's Presidency Bank War and IRA Uploaded by prazzperkasa on Dec 04, 2011. Bank of the U.S. failed, cotton prices fell, businesses went bankrupt, and there was widespread unemployment and distress. [276], When House committee members, as dictated by Congress, arrived in Philadelphia to investigate the Bank, they were treated by the Bank's directors as distinguished guests. [40][41] At the heart of the campaign was the conviction that Andrew Jackson had been denied the presidency in 1824 only through a "corrupt bargain"; a Jackson victory promised to rectify this betrayal of the popular will. [333], The Bank War has proven to be a controversial subject in the scholarly community long after it took place. In early 1832, the president of the B.U.S., Nicholas Biddle, in alliance with the National Republicans under Senators Henry Clay (Kentucky) and Daniel Webster (Massachusetts), submitted an application for a renewal of the Bank's twenty-year charter four years before the charter was set to expire, intending to pressure Jackson into making a decision prior to the 1832 presidential election, in which Jackson would face Clay. Jackson’s string of military success, despite the obstacles he faced, the poor results of other military leaders during the War of 1812 and his stunning victory at New Orleans made him a celebrated national hero, revered above all others except George Washington. [21] The Second Bank of the United States was given considerable powers and privileges under its charter. [103][104][105], In his second annual address to Congress on December 7, 1830, the president again publicly stated his constitutional objections to the Bank's existence. [287][288][289] All recharter efforts were now abandoned as a lost cause. [207] "The campaign is over, and I think we have won the victory", Clay said privately on July 21. McLane denied that he had any part in it. [6] State banks opposed recharter of the national bank because when state bank notes were deposited with the First Bank of the United States, the Bank would present these notes to state banks and demand gold in exchange, which limited the state banks' ability to issue notes and maintain adequate reserves of specie, or hard money. [292], On January 30, 1835, what is believed to be the first attempt to kill a sitting President of the United States occurred just outside the United States Capitol. Saying “The bank is trying to kill me, but I will kill it,” Jackson issued a potent veto message. By vetoing the recharter bill and basing most of his reasoning on the grounds that he was acting in the best interests of the American people, Jackson greatly expanded the power and influence of the president. [155][156] For the past six months he had worked in concert with B.U.S. Biddle received heavy criticism for his contraction policies, including by some of his supporters, and was compelled to relax his curtailments. "[158][162], Contrary to the assurances Livingston had been rendering Biddle, Jackson determined to veto the recharter bill. sentiment persisted in some western and rural locales. Distinctions in society will always exist under every just government. [228] Duane was a distinguished lawyer from Philadelphia whose father, also William Duane, had edited the Philadelphia Aurora, a prominent Jeffersonian newspaper. [121], These reforms required a rapprochement between Jackson and Biddle on the matter of recharter, with McLane and Livingston acting as liaisons. Benton called the statement an "atrocious calumny". One such cartoon was entitled "King Andrew the First". Although the President harbored an antipathy toward all banks, several members of his initial cabinet advised a cautious approach when it came to the B.U.S. Roosevelt. B.U.S. In case the B.U.S. [296] Jackson initially suspected that a number of his political enemies might have orchestrated the attempt on his life. [236][237] Van Buren had cautiously supported McLane's proposal to delay the matter until January 1, 1834. Jackson, as a war hero, was popular with the masses. [279] Nevertheless, this episode caused an even greater decline in public opinion regarding the Bank, with many believing that Biddle had deliberately evaded a congressional mandate. The affair resulted in the shutdown of the Bank and its replacement by state banks. [239], Attorney General Taney was immediately made Secretary of the Treasury[236][245] in order to authorize the transfers, and he designated Kendall as special agent in charge of removal. [171] He characterized the B.U.S. He presented five state-charted "pet" banks with drafts endorsed by the U.S. Treasury totaling $2.3 million. [75] Biddle carefully explored his options for persuading Jackson to support recharter. administrators, including Biddle, and Jackson continued to do business with the B.U.S. [66][67][68], The Second Bank's reputation in the public eye partially recovered throughout the 1820s as Biddle managed the Bank prudently during a period of economic expansion. Alarmed by the centralization in the Adams administration, most of them flocked to Jackson. McLane and Butler would likely receive confirmation easily, but Taney would definitely be rejected by a hostile Senate. [30] The election turned into a five-way contest between Jackson, Calhoun, John Quincy Adams, William H. Crawford, and Clay. reserves for speculative ventures. [271] On March 28, Jackson was officially censured for violating the U.S. Constitution by a vote of 26–20. Van Buren's solution to the Panic of 1837 was to create an Independent Treasury, where public funds would be managed by government officials without assistance from banks. Soon afterward, Jackson signed the Specie Circular, an executive order mandating that sales of public lands in parcels over 320 acres be paid for only in gold and silver coin. [295] He was deemed insane and was institutionalized. Let us know if you have suggestions to improve this article (requires login). [216][219], In his December 1832 State of the Union Address, Jackson aired his doubts to Congress whether the B.U.S. [331] The nation returned to deposit banking. As of 1830, the Bank had $50 million in specie in reserve, approximately half the value of its paper currency. I will first talk about Jackson’s war on against the U.S. Bank. In his left hand he holds a document labelled "Veto" while standing on a tattered copy of the Constitution. It was driven by South Carolina politician John C. Calhoun, who opposed the federal imposition of the tariffs of 1828 and 1832 and argued that the U.S. Constitution gave states the right to block the enforcement of a federal law. [138], The alliance between Biddle and Clay triggered a counter-offensive by anti-B.U.S. [156][205] Overall, the pro-Bank analysis tended to soberly enumerate Jackson's failures, lacking the vigor of the Democratic Party press. [206] Biddle mounted an expensive drive to influence the election, providing Jackson with copious evidence to characterize Biddle as an enemy of republican government and American liberty through meddling in politics. [190] By diverting both groups in a campaign against the central bank in Philadelphia, Jackson cloaked his own hard-money predilections, which, if adopted, would be as fatal to the inflation favoring Jacksonians as the B.U.S. Jackson’s decisive reelection in 1832 was once interpreted as a sign of popular agreement with the Democratic interpretation…. [55] The aversion to paper money went back before the American Revolution. Some people blamed a weak central government for America's poor performance during much of the War of 1812. [220] The committee's minority faction, under Jacksonian James K. Polk, issued a scathing dissent, but the House approved the majority findings in March 1833, 109–46. [124][119][134] After this, McLane secretly tried to have Blair removed from his position as editor of the Globe. Benton replied by criticizing the Bank for being corrupt and actively working to influence the 1832 election. He had caused Biddle to create one depression and the pet banks to aggravate a second, and he had left the nation committed to a currency and credit system even more inadequate than the one he had inherited." [54] Jackson and other advocates of hard money believed that paper money was part of "a corrupting and demoralizing system that made the rich richer, and the poor poorer". "Under such circumstances," he said, standing up, "then, sir, I would resign the presidency and return to the Hermitage." [182] Jackson cast himself in populist terms as a defender of original rights, writing: It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Clay finished fourth. [328], The Bank War far from settled the status of banking in the United States. John C. Calhoun, a representative from South Carolina and strong nationalist, boasted that the nationalists had the support of the yeomanry, who would now "share in the capital of the Bank". or eviscerate the central bank's regulatory influence too suddenly. [208], Jackson's campaign benefited from superior organization skills. However, Jackson won by a landslide. The report praised the Bank’s performance, including its regulation of state banks,[130] and explicitly called for a post-1832 rechartering of a reconfigured government bank. According to early Jackson biographer James Parton, Biddle "was a man of the pen—quick, graceful, fluent, honorable, generous, but not practically able; not a man for a stormy sea and a lee shore". Annual address to Congress, December 1829, Annual address to Congress, December 1830, Post-Eaton cabinet and compromise efforts, Annual address to Congress, December 1831, Renewal of war and 1832 address to Congress, Removal of the deposits and panic of 1833–34, Origins of the Whig Party and censure of President Jackson, National Archives and Records Administration, "When the U.S. paid off the entire national debt (and why it didn't last)", "Jackson escapes assassination attempt Jan. 30, 1835", "Rediscovering the Journal Clause: The Lost History of Legislative Constitutional Interpretation", "The Market for American State Government Bonds in Britain and the United States, 1830–43", "The Jacksonian Persuasion: Politics and Belief", "Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837", Federal Reserve v. Investment Co. Institute, https://en.wikipedia.org/w/index.php?title=Bank_War&oldid=991184827, Short description is different from Wikidata, Creative Commons Attribution-ShareAlike License, Carpenter, Daniel, and Benjamin Schneer. In what is perhaps the most memorable sentence of his book, Temin wrote (p. 82), “It would not be too misleading to say the Opium War was more closely connected to the American inflation than the Bank War between Jackson and Biddle.” [135] Taney's influence meanwhile continued to grow, and he became the only member of the President's official cabinet to be admitted to the inner circle of advisors in the Kitchen Cabinet. [209] Jackson's supporters hosted parades and barbecues, and erected hickory poles as a tribute to Jackson, whose nickname was Old Hickory. "By destroying Biddle's Bank Jackson had taken away the only effective restraint on the wildcatters ... he had strangled a potential threat to democratic government, but at an unnecessarily high cost. Jackson's war on the bank, combined with his intent on paying off the national debt, would lead to one of the worst depressions in American history. Jackson insisted that the circular was necessary because allowing land to be purchased with paper would only fuel speculator greed more, thereby worsening the crisis. It was hoped that the disappearance of the Federalist Party would mark the end of party politics. Arthur M. Schlesinger Jr., who wrote The Age of Jackson (1945), adopts a similar theme, celebrating Jacksonian democracy and representing it as the triumph of Eastern workers. [8] The chaos of the war had, according to some, "demonstrated the absolute necessity of a national banking system". Webster drafted a plan to charter the Bank for 12 years, which received support from Biddle, but Calhoun wanted a 6 year charter, and the men could not come to an agreement. When Congress voted to reauthorize the Bank, Jackson vetoed the bill. Many legislators benefited from the largesse supplied by Bank administrators. [256] By December, one of the President's advisors, James Alexander Hamilton, remarked that business in New York was "really in very great distress, nay even to the point of General Bankruptcy [sic]". Financial writer William Gouge wrote that "the Bank was saved and the people were ruined". branch bank in Nashville. With this accomplished, the administration would permit re-authorization of the central bank in 1836. A March 1830 report authored by Senator Samuel Smith of Maryland served this purpose. The Whigs attacked Jackson's specie circular and demanded recharter of the Bank. Catterall writes, "Just as in 1832 Biddle cared 'nothing for the campaign,' so in 1833 Henry Clay cared little or nothing for the bank." Economic problems which reverberated through the economy eventually led to major depression in the Panic of 1837 (which occurred during the term of Jackson's successor, Martin Van Buren ). [108][109][110] The address signaled to pro-B.U.S. branch offices in Louisville, Lexington, Portsmouth, Boston, and New Orleans, according to anti-Bank Jacksonians, had loaned more readily to customers who favored Adams, appointed a disproportionate share of Adams men to the Bank's board of directors, and contributed Bank funds directly to the Adams campaign. Be on the lookout for your Britannica newsletter to get trusted stories delivered right to your inbox. [63] Its role in managing the nation's fiscal affairs was central. After southerners discovered his connection to Van Buren, he was defeated by fellow Tennessean John Bell, a Democrat-turned-Whig who opposed Jackson's removal policy. It would not engage in lending or land purchasing, retaining only its role in processing customs duties for the Treasury Department. articles, essays, pamphlets, philosophical treatises, stockholders' reports, congressional committee reports, and petitions. He stated that one fifth of the Bank's stockholders were foreign and that, because states were only allowed to tax stock owned by their own citizens, foreign citizens could more easily accumulate it. [298] It began nearly 13 consecutive hours of debate. Biddle had orchestrated the maneuver in a desperate effort to keep the institution alive rather than allowing it to dissolve. of this essay is to discuss the Andrew Jackson Administration. [257] Calhoun denounced the removal of funds as an unconstitutional expansion of executive power. The Bank's supporters, however, struck back. Indeed, Livingston was alone in the cabinet, for only he opposed a veto, and Jackson ignored him. [219] Jackson, incensed at this "cool" dismissal, decided to proceed as advised by his Kitchen Cabinet to remove the B.U.S. The veto was intended to be used in extreme circumstances, he argued, which was why previous presidents had used it rarely if at all. Removal of Deposits Shortly after the election, the war escalated. The committee members refused, and no books were shown to them. He helped finance and distribute thousands of copies of pro-B.U.S. Clay in 1834 pushed a resolution through the Senate censuring Jackson for removing the deposits. An attempt by President Andrew Jackson to eliminate the Bank of the United States resulted in the rise of seven "pet banks, " state banks that received deposits of federal money on 1 October 1833. When Jackson was leaving through the East Portico after the funeral of South Carolina Representative Warren R. Davis, Richard Lawrence, an unemployed house painter from England, tried to shoot Jackson with two pistols, both of which misfired. The directors had grown alarmed that their specie reserves had dwindled to four million pounds, which they blamed on the purchase of American securities and poor harvests that forced England to import much of its food (if food imports created a trade deficit, this could lead to specie exports). [2] Jacksonian Democrats cited instances of corruption and alleged that the B.U.S. Not a member, register for a Gilder Lehrman account. [170] Further, while previous presidents had used their veto power, they had only done so when objecting to the constitutionality of bills. This is an excellent book on Andrew Jackson's battle against the Second Bank of the United States. during the presidency of Andrew Jackson (1829–1837). [229] McLane met Duane in December 1832 and urged him to accept appointment as Treasury Secretary. For support, Biddle turned to the National Republicans—especially Henry Clay and Daniel Webster—turning the issue into a political battle. The money supply and number of bank notes in circulation increased significantly in these years. However, one of the banks drew prematurely on B.U.S. The 1832 elections provided it with 140 pro-Jackson members compared to 100 anti-Jacksons. Immediately after Webster spoke, Clay arose and strongly criticized Jackson for his unprecedented expansion, or "perversion", of the veto power. What is the good, the bad, and the ugly of this easy-to-hate Southerner? [25] Andrew Jackson, previously a major general in the United States Army and former territorial governor of Florida, sympathized with these concerns, privately blaming the Bank for causing the Panic by contracting credit. until December 1829. "[71], Unfortunately for Biddle, there were rumors that the Bank had interfered politically in the election of 1828 by supporting Adams. In an effort to promote sympathy for the institution's survival, Biddle retaliated by contracting Bank credit, inducing a mild financial downturn. The intent was to put pro-Bank forces on the defensive. Jackson, like Congress, received petitions begging him to do something to relieve the financial strain. After the liquidation of the debt, future revenues could be applied to funding the military. The Bank's directors raised interest rates from three to five percent and restricted some of the open trade practices that they had previously granted to American import merchants.